Munday v. Austin
| Decision Date | 14 February 1949 |
| Docket Number | 40996 |
| Citation | 218 S.W.2d 624,358 Mo. 959 |
| Parties | Edith L. Munday, (Plaintiff) Appellant, v. Benjamin F. Austin, Isabella Fairfax, R. W. Poertner, Trustee Under a Certain Deed of Trust Dated July 9th, 1940, and Recorded in Book 5920 at page 441 of the Recorder's Office of the City of St. Louis, State of Missouri; and Aetna Realty Company, a Corporation, (Defendants) Respondents |
| Court | Missouri Supreme Court |
Rehearing Denied March 14, 1949 in Per Curiam Filed.
Appeal from Circuit Court of City of St. Louis; Hon. Eugene J Sartorius, Judge.
Reversed and Remanded (with directions).
Boggiano & Hessel, Meyer Hessel and William Healy for appellant.
(1) Benjamin F. Austin is the owner of the notes and deed of trust, and the only defendant having a substantial interest in the result of this action. The payee named in a promissory note is presumed to be the owner thereof until the contrary is shown. Hulse v. Richard Wade Kelley Post, 13 S.W.2d 555, 223 Mo.App. 467; 11 C.J.S., p. 91, sec. 659. (2) Where a party is proved to be the owner of an instrument at a given time the presumption of law is that he so continues to be such owner until the contrary is shown by countervailing proof, or by some stronger countervailing presumption of law. Newell v. La Font, 251 S.W. 472. (3) The evidence clearly shows that the notes and deed of trust were issued without consideration in view of the written and oral admissions made by defendant Benjamin F. Austin under oath in his bankruptcy proceeding. Admissions of a party to a suit are competent. They may be used by a plaintiff in proving his cause of action, and it is error for the court to exclude them or fail to give them due consideration. Latham v Hosch, 233 S.W. 84, 207 Mo.App. 381; Black v. Epstein, 120 S.W. 754, 221 Mo. 286; Wells v. Wells, 48 S.W.2d 109; Concrete Steel Co. v. Reinforced Concrete Co., 72 S.W.2d 118; Reiling v. Russell, 134 S.W.2d 33, 345 Mo. 517. (4) An admission may be made in a bankruptcy proceeding. Ensign v. Commonwealth of Pennsylvania, 227 U.S. 592, 57 L.Ed. 658, 33 S.Ct. 321, 30 A.B.R. 408; Remington on Bankruptcy, Vol. 5, p. 41, sec. 2007; Slakoff v. United States, 8 F.2d 9; Czarlinsky v. United States, 54 F.2d 889, certiorari denied 285 U.S. 549; 31 C.J.S., p. 1069, sec. 300. (5) Testimony by a party before a referee in bankruptcy, including the general examination of the bankrupt, is admissible against him as admissions in a subsequest suit against him and others. 5 Remington on Bankruptcy, p. 39, sec. 2005; Wilkison v. Livingston, 45 F.2d 465. (6) The notes and deed of trust cannot be considered as a gift since a note is but a promise to pay money in the future, and there is no delivery of the gift. Brooks v. Owen, 19 S.W. 723, 112 Mo. 251; Scottish Rite Temple Assn., of Kansas City v. Lucksinger, 101 S.W.2d 511, 231 Mo.App. 486; Perry v. First Natl. Bank of Kansas City, 68 S.W.2d 927, 228 Mo.App. 486. (7) If the notes cannot be enforced the deed of trust, which is only security for the notes, has no validity and cannot be enforced either. Finnerty v. John S. Blake and Brothers Realty Co., 207 S.W. 772, 276 Mo. 332; Donovan v. Boeck, 116 S.W. 543, 217 Mo. 70; Batson v. Peters, 89 S.W.2d 46; 41 C.J., p. 386, sec. 201. (8) The recitals of a sheriff's execution deed are sufficient prima facie evidence of the facts therein stated, and conclusive as to the regularity of all essential proceedings, in the absence of a contrary showing. Thorp v. Daniel, 99 S.W.2d 42, 339 Mo. 763. (9) As purchaser at the sheriff's sale plaintiff acquired all of the title, interest and rights of defendant Isabella Fairfax in the real property. Thorp v. Daniel, 99 S.W.2d 42, 339 Mo. 763; Garrett v. Wagner, 28 S.W. 762, 125 Mo. 450; Knoop v. Kelsey, 14 S.W. 110, 102 Mo. 291; Knoop v. Kelsey, 26 S.W. 683, 121 Mo. 642; 21 Am. Jur., p. 140, sec. 281; 33 C.J.S., p. 570, sec. 287. (10) Unless an encumbrance is made part of the consideration or deducted from it, or the grantee assumes the encumbrance, the purchaser at an execution sale may question the validity of an encumbrance on the property, even though at the time of the sale and for a long time afterwards he thought the encumbrance was valid. Huffman v. Nixon, 53 S.W. 1078, 152 Mo. 303; Brooks v. Owen, 19 S.W. 723, 112 Mo. 251; 23 C.J., p. 770, sec. 820; 33 C.J.S., p. 578, sec. 291.
Dubinsky & Duggan and McLaran & Garesche for respondents.
(1) The power to cancel a deed of trust is not to be exercised except in a clear case. Hamilton v. Steininger, 350 Mo. 698, 168 S.W.2d 59; Nelson v. Hammett, 189 S.W.2d 238; Edinger v. Kratzer, 175 S.W.2d 807; Hedrick v. Hedrick, 350 Mo. 716, 168 S.W.2d 69; Dreckshage v. Dreckshage, 352 Mo. 78, 176 S.W.2d 7. (2) To justify the cancellation of a deed of trust the proof must be so clear, cogent, convincing and complete as to exclude any reasonable doubt. Plaintiff's proof was weak, incomplete and unsatisfactory. Bross v. Rogers, 187 S.W. 38; Platt v. Platt, 343 Mo. 745, 123 S.W.2d 54; Hamilton v. Steininger, 350 Mo. 698, 168 S.W.2d 59. (3) The notes import a consideration. The burden was on plaintiff to prove want of consideration, and the proof must be substantial. The only evidence adduced by plaintiff were alleged admissions of defendant Austin made at a time when he was not the owner of the notes. This evidence was insufficient to overcome the strong presumption of consideration. Gordon v. Raymond, 186 S.W.2d 849; Coleman v. Crescent Insulated Wire & Cable Co., 350 Mo. 781, 168 S.W.2d 1060; North Side Finance Co. v. Sparr, 78 S.W.2d 892; Glascock v. Glascock, 217 Mo. 362, 117 S.W. 67; Hess v. Hessel, 102 S.W.2d 729; Secs. 3040, 3345, R.S. 1939. (4) The admissions relied on do not prove that the notes and deed of trust were executed without any consideration. They are simply to the effect that defendant Fairfax executed various deeds of trust for Austin's accommodation and with the intention and purpose that Jefferson Bank and Trust Company advance money on the faith thereof. Considered in the light most favorable to plaintiff, this evidence proves they was a consideration, which was the money parted with by the bank. The bank was a holder in due course and still held the instruments, in an unimpeached transaction, on June 24, 1943, the date of the execution sale. The deed of trust was therefore valid and enforceable. Bank of Moberly v. Meals, 316 Mo. 1158, 295 S.W. 73; Graham v. Finnerty, 276 Mo. 332, 232, S.W. 129; Farmers State Bank v. Miller, 222 Mo.App. 633, 300 S.W. 834; 41 C.J. 385, sec. 198. (5) Plaintiff's petition was properly dismsised for the reason that the deed of trust was a valid and enforceable lien against the property when she purchased the real estate at the execution sale on June 24, 1943. The deed of trust was not a fraudulent, fictitious conveyance, but was, on plaintiff's own evidence, held by the Jefferson Bank and Trust Company for a valuable consideration parted with by the bank. Plaintiff purchased the property subject to all the then existing valid liens including this deed of trust. Under the circumstances she acquired only the equity of redemption. Hubble v. Vaughan, 42 Mo. 138; Parkey v. Veatch, 68 Mo.App. 68; Hunter v. Hunter, 327 Mo. 817, 39 S.W.2d 359; McClintock v. Central Bank of Kansas City, 120 Mo. 127, 24 S.W. 1052; Campbell v. Tompkins, 32 N.J.Eq. 170; Brigham v. Brown, 44 Mich. 59.
ELLISON
This is an appeal from the circuit court of the City of St. Louis, wherein the plaintiff-appellant seeks to enjoin the forecloseure of a deed of trust on land, and to cancel the same and the notes secured thereby, on the ground that they were without consideration. The circuit court found for the respondent-defendants and dismissed the appellant's petition. On her appeal to the St. Louis Court of Appeals, that court transferred the cause to this court on the ground that it had no appellate jurisdiction, the title to real estate being involved within the meaning of Art. V, Sec. 3, Const. Mo., 1945.
That ruling was made on authority of Nettleton Bank v. McGauhey's Est., 318 Mo. 948, 953-4(3), 2 S.W.2d 771, 775(8), which held that a suit to foreclose a mortgage does not involve title to real estate in the constitutional sense, because in such instances the basic title is conceded to be in the mortgagor, and the effort is merely to enforce the mortgage lien resting thereon, whereas a suit to cancel a mortgage on the ground of fraud would involve title because it would destroy the mortgagee's "muniment of title", citing Hanna v. So. St. Joseph Land Co., 126 Mo. 1, 10(1), 28 SW. 652, 653(1). On the other hand it has been consistently held that where a suit seeks to cancel or enjoin the foreclosure of a mortgage on the ground that the mortgage debt has been paid, the proceeding does not involve title, and is simply a dispute over the mortgage debt. Loewenstein v. Queen Ins. Co., 227 Mo. 100, 127(9), 127 SW. 72, 84; Vandeventer v. Flordia Savings Bank 232 Mo. 618, 622 et seq. (2), 135 SW. 23, 24.
From these decisions it will be seen that where the essential and inherent validity of the mortgage itself is in dispute, title is involved. In other words, the mortgage is regarded as a part or segment of the title, constituting a cloud on the title if it is invalid. But if the dispute is merely over the foreclosure of the mortgage or the indebtedness secured thereby, it does not involve title. At least recent decisions have reviewed this question and so held: Peters v Kirkwood Fed. Sav. & L. Ass'n, 344 Mo. 1067, 1070(2), 130 S.W.2d 507, 508-9(1-2); Castorina v. Herrmann, 340 Mo. 1026, 1030(1), 104 S.W.2d 297, 299(1). In the latter case...
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